Phillips 66 (NYSE:PSX) Reports Double Earnings while the Company’s Revenue Goes Down

Lisa Bradley — Wed, 29 Oct 2014 18:58:55 +0000

Before the stock market kicked off in the United States today (Wednesday) energy and logistics manufacturing company Phillips 66 (NYSE:PSX) announced its results for its third quarter earnings. The revenue for Phillips 66 (NYSE:PSX) missed estimates of $48.36 and was recorded at $41.05 billion with Earnings per Share or EPS of $2.02, which beat analysts’ estimates of $1.75 EPS. This year’s revenue was less than last year’s third quarter figure of $44.20; whereas this year’s EPS was more than last year’s third quarter EPS of $0.87.

Phillips 66 (NYSE:PSX) hopes to make the most of North America’s increased production by holding on to any growth opportunity it finds. To achieve its objectives the company teamed up with North Dakota production area of Three Forks, Bakken Energy Transfer Crude Oil Pipeline and Dakota Access Pipeline. Commercial operation of these joint ventures will commence in 2016’s fourth quarter.

Phillips 66 (NYSE:PSX) also purchased 500 more rail cars for the Ferndale Refinery and Bayway Refinery. The company has chose North Dakota for constructing its facility for rail-load; this facility will give Phillips 66 (NYSE:PSX) a capacity of 200,000 barrels/day. This will allow the company to have more Bakken crude oil access.

According to Chief Executive Officer and Chairman of Phillips 66 (NYSE:PSX) company’s operations during its third quarter did well with strong marketing and refining businesses margins. Even though there was an uncertain downtime, but Phillips 66’s (NYSE:PSX) earnings were good enough and did not suffer much. He further said that with recently announced Energy Trasnfer Crude Oil Pipeline and Dakota Access Pipeline the company will have more integration with its Beaumont Terminal. He also said that company’s strategy for midstream growth was being executed with great pace.

Here is a snapshot of Phillips 66’s (NYSE:PSX) third quarter results;

Adjusted earnings for the quarter as compared to last year’s third quarter were reported as follows;

22% dip in midstream, which came to $115 million this year
14% jump in chemicals, which was recorded to be $299 million
From last year’s $30 million loss, refining was recorded at $558 million this year
1.5% jump up in Specialties and Marketing, which was recorded to be $259 million

On the 13^th of October Barclays retreated the Overweight rating of the Phillips 66 (NYSE:PSX) stock with a price target between $109 and $100. On the 8^th of October Deutsche Bank started to cover the company’s stock and gave it a rating of Hold with a $99 price target. Phillips 66’s (NYSE:PSX) stock’s current consensus price target stands at $93.36.

Phillips 66 (NYSE:PSX) opened its today’s trading session with a 1% dip as compared to yesterday’s value of $78.56; after almost three hours into the trading session the stock took a dip by -0.61% and landed at a value of $77.06. The stock’s range over 52 weeks has been between 63.05 and 87.98; whereas its total market cap is 43.08B. Phillips 66’s (NYSE:PSX) inst. ownership is 72%. The stock closed at a value of $77.53 on Tuesday (yesterday).

Phillips 66 (NYSE:PSX) Reports Double Earnings while the Company’s Revenue Goes Down was first posted on October 29, 2014 at 2:58 pm.
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Phillps 66 (NYSE: PSX) Will Be The Next Leader In US Oil and Gas

Mark Michaels — Wed, 30 Jul 2014 02:00:31 +0000

Over the last ten years, the United States gas and oil industry has experienced impressive growth, and has largely outgrown the development of the auxiliary infrastructure that was required to help sustain its profitability in the long term. Production has been unable to grow exponentially, and focus has been redirected from extraction to transportation, storage, and alteration of oil and gas. Phillps 66 (NYSE: PSX) has followed suit, and begun to invest in projects and changes that will yield the company huge benefits as the United States gas and oil industry moves to its next stage of development. Throughout the last decade or so, our development of shale oil has enabled us to generate enough oil to last one hundred years, and has given the United States the boost it needed to get back on its feet to compete with other world economies when we had fallen in a recession. However, due to overestimated revenue as well as 3 year leases where companies drilled for as much oil as they possibly could, the following production created a supply bump that dragged prices all the way from almost $11 million per cubic feet to just under $2 per cubic feet in 2012. This caused companies such as Shell (OTCQB: RYDAF) and BHP Billiton (NYSE: BHP) to sell at a significant loss. On the other hand, smaller oil companies were able to secure better drilling sites, and have been finding oil at a sustainable rate through this slump in gas prices. Production levels at six of the thirty largest drilling sites are disproportionately producing 88% of the total oil production. These sites are starting to lose their capability of keeping up with their previous exponential growth rates. According to experts in the industry, production levels overall will soon begin to level and they will drop by the year 2020. Although interest in investment is high, investors are beginning to realize the highly risky nature of this field. While some fields at this price level may not be viable in the long term, the industry is not likely to be a bubble that will collapse and production completely stops. It is clear that the business is suffering from an excess of supply, forcing the price of gas down. When combined with extraction rates as low as 7% (versus the traditional natural gas extraction rate of 75%) and high depletion rates in shale gas, oil and gas companies are forced to build and drill more and more wells. This situation has also been worsened by the “drill or kill” leases that give drilling companies three years to drill before voiding their leases. One expert in the industry stated that the average capital expenditure of 35 analyzed companies has increased to a total of $50 per barrel of oil, when their revenue per barrel of oil is $51.50. Due to the inherent nature of shale oil, high depletion rates are to be expected and results in to necessity to always reallocate funds towards exploration drilling so that the company can maintain and increase production levels. Then take into account the inevitable happening of diminishing returns with future drilling, the industry will gradually move towards an equilibrium where the gas price will be raised so that these companies stay economically viable. Phillips 66, a secondary company to ConocoPhillips (NYSE: COP), is a company that is heavily invested in the chemical space, a business that benefits from lower gas prices, and midstream operations. This puts the company in a good position to take control of the oil industry. In fact, Phillips 66 has already begun moving towards the storage, transportation, and conversion of shale gas and oil. This focus on assets that are high in demand and highly profitable makes the company less vulnerable to the highly unstable refining industry. Phillips is positioning itself in the energy industry in the United States to become a dominant leader and take the many opportunities that awaits it.

Phillps 66 (NYSE: PSX) Will Be The Next Leader In US Oil and Gas was first posted on July 29, 2014 at 10:00 pm.
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Phillips 66 (NYSE:PSX) Reports Double Earnings while the Company’s Revenue Goes Down

Phillps 66 (NYSE: PSX) Will Be The Next Leader In US Oil and Gas